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Q1 2010 Earnings Call – Southwestern Energy Co.

Southwestern Energy Co. · Apr 30, 2010 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 1
    High adventure April 2010 Update NYSE: SWN
  2. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 2
    Southwestern Energy Company General Information Southwestern Energy Company is an integrated natural gas company whose wholly-owned subsidiaries are engaged in natural gas and oil exploration and production and natural gas gathering…
  3. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 3
    About Southwestern Focused on domestic exploration and production of natural gas. h 3,657 Bcfe of reserves; 100% natural gas; 12.2 R/P at year-end 2009. E&P strategy built on organic growth through the drillbit. h Over 75% of…
  4. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 4
    Recent Developments 2009 Highlights h Production of 300.4 Bcfe, up 54%. h Reserves of 3.7 Tcfe, up 67%. h Discretionary cash flow(1) of 1.4 billion, up 23%. h Finding and development cost of 0.86 per Mcfe (including reserve…
  5. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 5
    Proven Track Record For the Periods Ended December 31 Reserve Production (Bcfe) Replacement (%) EBITDA (MM)(1) F&D Cost (/Mcfe) 400-410E 592 1,362 1,368 523 2.72 2.55 300 474 399 386 1.70 364 195 313 675 1.59 1.43 1.53…
  6. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 6
    Areas of Operations Exploration & Production Segment Conventional Arkoma PENNSYLVANIA 2009: 3,657 Bcfe of Reserves Reserves: 208 Bcf (6%) 100% Natural Gas Production: 22.0 Bcf (7%) Production 300.4 Bcfe Net Acres: 338,486…
  7. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 7
    Capital Investments 2,500 Corporate & Other 2,100 Midstream Services 2,000 Drilling Rigs 1,796 1,809 Property Acquisitions ( Millions) 1,503 1,500 Cap. Expense & Other E&P Leasehold & Seismic 942 Development Drilling…
  8. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 8
    East Texas Louisiana SWN Acreage Texas Ms La Texas Haynesville Shale Prospective Area 95 95 Wells Wells CHK CHK -- 120 120 Wells Wells Tyler Overton Avg Avg IP: IP: Avg Avg IP: IP: Eas Sal t Texa 8.0 8.0…
  9. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 9
    Marcellus Shale Millennium Stagecoach New York New York Pennsylvania Range Trust Pennsylvania Greenzweig Tennesse e Gas 4.5 MMcf/d Price 4.0 MMcf/d West CHK Virginia CHK 10.1 MMcf/d 8.9 MMcf/d RRC 13.0 Cabot MMcf/d…
  10. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 10
    New Brunswick, Canada Project Marysville Marysville SWN currently holds exploration 2,309,247 2,309,247 acres acres licenses to over 2.5 million acres within the Maritimes Basin Principal targets are the conventional and…
  11. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 11
    Fayetteville Shale Focus Area AR Conventional Fairway 763,293 Net Acres Existing Pilots Ozark ld Moorefie Area ive Prospect Chattanooga Test 125,400 Net Acres HBP Boardwalk Centerpoint Fayetteville Lateral Ozark…
  12. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 12
    Fayetteville Shale - Improving Well Performance Wells Average 30th-Day 60th-Day Placed on IP Rate Avg Rate Avg Rate Avg Lateral Time Frame Production (Mcf/d) ( of wells) ( of wells) Length 1st Qtr 2007 58 1,261 1,066 (58) 958 (58)…
  13. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 13
    Fayetteville Shale - Horizontal Well Performance 3,500 4,000 250 283 208 175 151 106 78 52 39 27 17 5 4 1 1 Well Count 3,000 3.0 Bcf Typecurve 2.5 Bcf Typecurve 2,500 2.0 Bcf Typecurve Wells with Laterals 4,000 Feet Wells…
  14. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 14
    Fayetteville Project - Gross Production 1,400 1,200 Gross operated production of approx. 1,188 MMcf/d as of February 20, 2010 Gross Production (MMcf/d) 1,000 800 600 Pipeline Curtailment 400 Issues 2009…
  15. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 15
    Midstream - Adding Value Beyond the Wellhead DeSoto Gathering Lines Transmission AR Compression Facility 0 10 20 Miles Independence k ar Oz Johnson Van Buren Cleburne Ozark Pope oin t terp Ozark Cen Oz Boardwalk…
  16. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 16
    Outlook for 2010 Production target of 400 - 410 Bcfe in 2010 (estimated growth of 35%). 2009 2010 Guidance Actual NYMEX Price Assumption 3.99 Gas 4.00 Gas 5.00 Gas 6.00 Gas 58.36 Oil 70.00 Oil 70.00 Oil 70.00 Oil h Adj. Net…
  17. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 17
    The Road to Invest in the Highest PVI Projects. Flexibility in 2010 Capital Program. Maintain Strong Balance Sheet. Deliver the Numbers. h Production and Reserves. h Maximize Cash Flow. Continue to Tell Our Story. 17…
  18. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 18
    Appendix 18
  19. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 19
    Financial & Operational Summary Year Ended December 31, 2009 2008 2007 ( in millions, except per share amounts) Revenues 2,145.8 2,311.6 1,255.1 (1) EBITDA 1,368.1 (3) 1,362.3 (2) 675.4 Adjusted Net Income 522.7 (3) 567.9 (2)…
  20. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 20
    Gas Hedges in Place Through 2011 Bcf 24 22 Hedged Avg Price per Mcf Percent Type Volumes (or Floor / Ceiling) Hedged 20 2010 Swaps 36.0 Bcf 9.04 9% Collars 30.0 Bcf 6.80 / 8.43 7% 2011 Swaps 30.0 Bcf 6.69 - 18 Collars 7.3 Bcf…
  21. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 21
    SWN is One of the Lowest Cost Operators 3.50 3.00 2.50 Lifting Cost 2.00 per Mcfe of Production 1.50 (3 year average) 1.00 0.50 0.00 SWN EOG NBL UPL CHK RRC FST COG DVN KWK NFX APC XEC SD PXD SM APA DNR 8.00…
  22. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 22
    Fayetteville Shale Activity Compared to the Barnett 2508 Barnett Shale Play 2117 1981 1st Well Drilled 1513 1214 1992 1st Horizontal Well Drilled 701 1997 1st Slickwater Frac 260 2 70 1 669 663 524 165 408 351 Average 28…
  23. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 23
    Fayetteville Shale Production Compared to the Barnett 2,400 2,200 2,000 5 Years 25 Years Total Fayetteville Shale Field Average Daily Production 1,800 for November 2009: 1,798 MMcf/d 1,600 1,400 MMcf/d We collapsed…
  24. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 24
    U.S. Gas Consumption and Sources Bcf 25,000 20,000 15,000 U.S. gas consumption and production rising 10,000 in recent years. 5,000 0 1975 1980 1985 1990 1995 2000 2005 U.S. Gas U.S. Dry Gas Net Imports…
  25. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 25
    U.S. Electricity Consumption on the Rise 350 325 Billion 300 Kilowatt Hours Per Month 275 250 225 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Source: Edison Electric Institute 25
  26. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 26
    U.S. Gas Drilling and Prices Gas Rigs Gas Price Drilling /MMBtu 2,000 15.00 1,700 12.00 1,400 9.00 1,100 6.00 Gas Rigs 800 Gas Price 3.00 500 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source:…
  27. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 27
    Oil and Gas Price Comparison /Bbl /MMBtu 150.00 15.00 Henry Hub 120.00 Natural Gas 12.00 (right scale) 90.00 9.00 60.00 6.00 WTI Crude (left scale) 30.00 3.00 0.00 0.00 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08…
  28. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 28
    Explanation and Reconciliation of Non-GAAP Financial Measures: Net Cash Flow We report our financial results in accordance with accounting principles generally accepted in the United States of America (GAAP). However, management…
  29. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 29
    Explanation and Reconciliation of Non-GAAP Financial Measures: Adjusted Net Income Additional non-GAAP financial measures we may present from time to time are net income attributable to Southwestern Energy and diluted earnings per…
  30. Q1 2010 Earnings Call – Southwestern Energy Co. – slide 30
    Explanation and Reconciliation of Non-GAAP Financial Measures: EBITDA EBITDA is defined as net income plus interest, income tax expense, depreciation, depletion and amortization. Southwestern has included information concerning EBITDA…

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